Correct, and these benefits come with extra costs, namely inferior tax treatment, 20% of your profits and more expensive exchange fees. So do the math first and see if it is worth it...
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Correct, and these benefits come with extra costs, namely inferior tax treatment, 20% of your profits and more expensive exchange fees. So do the math first and see if it is worth it...
Thank you Pekelo,
So what is the risk to TST?
The only risk I calculate is, I am funded for the 30K plan and instantly lose $1.5K of their money and removed from the funded account. Am I correct?
If everything goes well for me, I make $5K and anything after that subtract 20%, plus self employment taxes and exchange fees for being professional trader.
I think so (if you ignore the proportion of their administrative costs incurred by TST over having people enrolled, anyway).
You can pass a $150k Combine and get funded, and lose just under $3,000 per day for the first few days, certainly, so it's not exactly risk-free from their perspective. But I think your figure above is probably the $30k Combine equivalent of that, in which case you're right.
Again, that sounds right, to me.
Technically you're trading "other people's money", as discussed above, so you need to pay the $85 per exchange for fees. (TST doesn't get that money, of course.)
i wonder why many of TST traders choose CL initially, while it may be a suitable instrument for one or two lot trading but i think it would be problematic in higher lots like 10 or more. the trader will encounter a lot of slippage .in one of Micheal Patak's interviews he said one of funded traders ,trades up to 20 lots of ES .i doubt if any CL trader can reach this amount without wasting 5-20 points of slippage ,which costs 50-200 $ per trade .
Before I respond, I would like to congratulate you, because you are actually doing due diligence research before you make the jump. And it is faster (even though this is one long thread) to read through this thread, than learn from your own experience. So you are doing good.
On the other hand I keep repeating myself, so although asking for my personal advice is flattering, I am trying to get away from this thread and TST. Thus I will give my final word and the decision is yours...
Yes, but there are other things to consider. Most combiners don't get founded on the first try and time and money wasted on a dream is opportunity (to do something else) lost. So you can easily end up paying for 4-5 combines and spending 6 months on TST, when you could be earning a salary somewhere else. So although using TST might be cheaper for a newbie trying his hands at trading, we shouldn't forget the time factor. With your own money, you might lose it quickly in a month, then you decide trading is not for you, (or you don't have more money) and you start a new carrier. That could be a better outcome than getting stuck in TST's hamster wheel and keep dreaming of how great a trader you going to be.
So just sit down and do the math for 3 scenarios split in 2 ways, trading with TST and trading on your own: You lose money, you make a little and you make a lot.
--You lose 5-6 combine fees vs. you lose a small account of yours.
I used to joke that TST's slogen is:"Don't lose your money quickly to the market, when you can do it slowly to us." If you are paying for multiple combines, you might as well just lose that money in your real account and get over the dream quickly.
--You make a little money with TST vs. you do it on your own.
Here TST's 20% cut and their exchange fees (2 instruments for 12 months is 2040 extra bucks) will hurt a lot, so you are better on your own.
--You make it rain with TST or you do it own your own.
Here the tax advantage of being a trader will guide you to leave them after a year, not to mention that you don't want to pay them an extra 20% on big profits...
TL;DR: Unless you are an underage kid who can't open an account on his own or you live in a low cost of living country, TST is not a good deal...
Well, I think I am done with this thread....
On the other hand I keep repeating myself, so although asking for my personal advice is flattering, I am trying to get away from this thread and TST. Thus I will give my final word and the decision is yours...
Yes, but there are other things to consider. Most combiners don't get founded on the first try and time and money wasted on a dream is opportunity (to do something else) lost. So you can easily end up paying for 4-5 combines and spending 6 months on TST, when you could be earning a salary somewhere else. So although using TST might be cheaper for a newbie trying his hands at trading, we shouldn't forget the time factor. With your own money, you might lose it quickly in a month, then you decide trading is not for you, (or you don't have more money) and you start a new carrier. That could be a better outcome than getting stuck in TST's hamster wheel and keep dreaming of how great a trader you going to be.
So just sit down and do the math for 3 scenarios split in 2 ways, trading with TST and trading on your own: You lose money, you make a little and you make a lot.
--You lose 5-6 combine fees vs. you lose a small account of yours.
I used to joke that TST's slogen is:"Don't lose your money quickly to the market, when you can do it slowly to us." If you are paying for multiple combines, you might as well just lose that money in your real account and get over the dream quickly.
--You make a little money with TST vs. you do it on your own.
Here TST's 20% cut and their exchange fees (2 instruments for 12 months is 2040 extra bucks) will hurt a lot, so you are better on your own.
--You make it rain with TST or you do it own your own.
Here the tax advantage of being a trader will guide you to leave them after a year, not to mention that you don't want to pay them an extra 20% on big profits...
TL;DR: Unless you are an underage kid who can't open an account on his own or you live in a low cost of living country, TST is not a good deal...
Well, I think I am done with this thread....
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In the simplest of terms, the way to view the live account is as follows:
ALL live account balances on Day 1 will start at "ZERO" (i.e., the "starting" balance).
On Days 1 through 10, your goal is to build up the balance (i.e., equity). During this time, you are being financially backed with whatever maintenance margin is required for the maximum allowable lot sizes you are allowed to trade, PLUS the allowance for the maximum allowable draw during the first ten days only. These ten days do not have to be consecutive calendar days, just 10 days of trading in total.
On Day 11, you will either have a positive or negative balance. If you are BELOW the "$0" starting balance (i.e., negative equity), then you will lose the funded trading account.
On Day 11, if you are ABOVE the "$0" starting balance (i.e., positive equity), then you can continue with the funded trading account.
However, on Day 11 and beyond, you are being funded with MAINTENANCE MARGIN ONLY, since the "equity" is what you created in the first 10 days of the live account. In your example, you would have $2,000 in equity, not a balance of $32k, since all live accounts start at zero. That $2,000 is the maximum allowable amount you are allowed to lose, until of course, you build more equity.
The key is to follow the scale up rules, and try and maximize it during the critical first 10 days of the live account, ensuring that your equity is high enough to justify trading.
https://topsteptrader.desk.com/customer/portal/articles/1950862-funded-trader-scaling-plan
Yes, that is why you must consider trying to trade the combine AS IF it was already a live account, using the same lot sizes and using the scale up rules.
"i wonder why many of TST traders choose CL initially..."
1. volatility
2. adapts to the "base 10" model (1 tick equals $10 bucks, 10 ticks equals $100 bucks, etc.)
3. only 1 restricted event per week (must be flat pre/post number), whereas TST requires a trader to follow 18 "restricted events" for ES.
4. CL is priced similar to a stock, and most traders are familiar with stocks, so it's an easy adaptation to trade CL initially.
5. promotion of those who passed the combine with CL will generate more interest in CL.
Here's the latest report from CME regarding the leading products:
http://www.cmegroup.com/education/files/cme-group-leading-products-2016-q2.pdf